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Yesterday we said:
Sure enough we got the strength into the close, however this morning we also got a mega mini double top and a complete gap fill from yesterday’s opening strength with a side order of a back test of the pink trendline to the upside break from the day before all shown below.
No sooner than the mid week newsletter came out and the indexes nosedived by breaking all the mentioned above. All of which made for a market nobody wants anything to do with. So here we sit testing support levels in the indexes as shown below. Here too the big question is whether or not those supports hold.
As you can see from the 60 minute charts above we’ve came down and tested the recent lows complete with an undercut today and down to 1305 on the S&P 500. Just below here the 1300 level looms. That all said we MAY have just dodged a bullet and gotten the worst out of the way for at least a day or two in the zone at the least. If so then we’ll use any near term strength to continue to prune our names with the most gains. Think AAPL and SFLY.
As far as going long here? APKT would be about the only one we currently see that we’d consider FOR A TRADE. As for the short side? We’ll want to continue to build out that list but not go short as the 60 minute index charts show us potentially being near an bounce point. See the RSI , See the Full Stoh’s? that and 1300 is near says we are just about due for some sort of pop here. Its what happens in the pop we want to be aware of. Any pop may be just what we need to see to feel comfortable going short. Sell the rips right?
Our IBM and CAT are still holding support levels and that is a good thing but given how volitile things have been in both directions?
We used some opening strength to walk away from PLCM which leaves AAPL and SFLY the next two names on a short leash here that we want to watch.
And that is the order of the rest of the week.
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Short Side Coming Attractions
Before we get into CVX below check out this chart of the CRB commodity index. Look familiar?
CVX
6-1 Say come to think of it doesn’t BIDU, SINA and SLV look a tad similar? Think first thrust down, now snapping back below the 50 day average? Just saying
6-2 As you can see CVX broke to the downside today therefore we will move this issue to the featured list.
Tentatively we add BIDU and SINA with emphasis on tenative as these two stocks are not for the faint at heart and always make big swings. With each of them its all about a break to the downside of the pink bear channels for shorting puposes.
BIDU
SINA
Also keep an eye on SLV and IRBTas both at looking like nothhing more than a POL (Pullback Off Lows) back up to the 50 day average.
IRBT
NEW NAME
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LONG SIDE WATCH LIST If I were to put money to work here. Where do I put it?
"Only The Best And Forget The Rest "
"We Trade What We SEE, NOT What We Think, Hear Or Fear "
Remember the name of the game is Pullback Off Highs (POH) as it’s the only pattern you’ll ever need.
APKT
NEW NAME
6-2 If you own it, the red support level is all you need to know for stop loss levels, a downside break that is. Same goes for if you are looking to go long in here.
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FEATURED BUT NOT TRADE TRIGGERED BY US
This is where names that we have on our watch list that have triggered but for whatever reason we did not take them (can’t do them all) in our trade trigger alerts. This section is because a lot of our subscribers opt to use our information as they see fit from a do-it-yourselfer standpoint.
Long side
ARBA
SLV
6-2 Gosh one more trip back to the 50 day with failure is what we need to see to consider taking a short sell on SLV.
ABV
6-2 Still looks ok but we’ll end up deleting this name and ACOM,ARBA in order to free up space soon.
ACOM
6-2 Right down to support from the looks of the chart.
GLD
6-2 Approaching resistance in red
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All About Options In The World According To All About Trends
NOTE: The exchanges recently started WEEKLY EXPIRATIONS of options. Going forward, make sure that you check to see which ones you are buying. Let’s stay with traditional options expirations which are the ones that expire the 3rd Saturday of every month.
Options Watch List — Nothing new at this point
Current Holdings
IBM (We are now long 2 JUNE 160 call options to open at 7.30)
As we post they are currently trading at 6.30
ILMN (We are now long 2 JUNE 65 call options to open at 6.30)
As we post they are currently at 7.90
SFLY (We are now long 2 JUNE 50 call options to open at 5.40)
As we post they are currently are 8.10
CAT (We are now long 2 JUNE 95 call options to open at 11.10)
As we post they are currently at 8.35
AAPL (We are now long 1 JUNE 320 call option to open at 22.30)
As we post they are currently at 27.35
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Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
ILMN (We are LONG 200 shares at 70.59 as of 5-25-11)
6-1 Sure likes that 50 day/ trendchannel line huh?
SFLY (We are LONG 200 shares at 54.24 as of 5-25-11)
PLCM (We WERE LONG 200 shares at 54.65 as of 5-17-11)
This morning we walked away from this issue. We bought it at 54.65 and sold it two weeks later at 59.53 for a gain of 976.00 all the while the market has been all over the place with a downward bias. Folks 4 trades like this per month in buy the dips at technical supports and sell the rips and you’ll never look back. Heck even half of that you’ll never look back over the course of a year. And THAT MAY be the plan this summer. Hit and run, get in get out.
AAPL (We are LONG 50 shares at 338.15 as of 5-5-11)
6-2 Getting stronger and now up for the day.
CAT (We are LONG 150 shares at 105.15 as of 5-5-11)
6-2 Given all the wickedness we’ve seen over the last month or so we really cant complain. We’ve held our ground, stayed focused and let our stocks tell us what to do vs our emotions. Even the last two days romp while not pretty we’ve still managed to keep things simple and in perspective. Again here too we really can’t complain.
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To our NEW SUBSCRIBERS
What we’ve tried to do is break our watch list down into chart pattern recognition structure from a visual standpoint. Learn the patterns and the components of patterns and you’ll blow those Wall Street MBAs away. You don’t need a $3,000 software program either. All you need is a BURNING DESIRE to be the best that you can be and we’re here to help.
We have a lot of new folks here and we thank you! We want you to take it easy, get to know how the routine works around here for awhile and to feel comfortable.
We hope you all aren’t here because you are chasing performance. For us it’s more about educating and making you the best you that you can be first (that’s what we focus upon!). Like many of our long time subscribers they have all found out that they have no use for traditional Wall Street (and we don’t blame them) and it’s our hope that over time you’ll have acquired enough knowledge from us to say the same with conviction.
One of the most important things we want to stress is that of RISK MANAGEMENT via POSITION SIZING. You don’t need to stack your account with just a few big positions as we’ve seen it time and time again that those who get into trouble are the ones who take large positions and do not employ any risk management system IE shoot for the fences. Those are the people who live on the fringes of extremes and yes ultimately get burned.
As a guideline a good initial system is that of the following example.
Let’s say you have a $100,000 virtual portfolio and let’s say that as a guide you never place more than 10% ($10,000) into any one position. Now let’s say that one day a news driven event hits (over which you have no control over anyway) and one of the positions tanks 20%. On its own that position is sporting a $2,000 loss, while that may seem devastating on its own its really no big deal overall.
Why? Simple its all about risk management being properly employed. What is the impact of a $2,000 loss to the TOTAL VALUE of the virtual portfolio in this example.
Answer: A whopping 2% LOSS. Now you know why we say no big deal.
We can also tell you new people here that you will get stopped out of names and you will take hits. There is nobody on the planet living that has ever hit 18 holes in one and there never will be. We’d rather get you grounded in reality right away vs talking about pie in the sky all the time like a lot of other sites. In so doing your head is screwed on straight from the start and when those days happen (and they will) mentally it won’t mean a thing to you. To us that’s what’s most important is YOUR state of mind as it’s your most important asset. We hope you appreciate our honesty.
We have a very good retention rate here at All About Trends and a lot of great outstanding people here. We like to think that a part of that is being upfront about what can happen (in both directions). Verses those up 500%, I turned $50,000 into $3 million or some other absurd number to get you to bite. That’s not who we are.
WELCOME ABOARD!
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Lastly with regards to taking any trade:
Remember the moment you take a trade you are at the mercy of the market and have no control except when to sell. If you are not willing to take the risk and are not willing to pay that price do not take the trade. We are willing to take that risk knowing full well the end result could be a loss. That said make sure that virtual portfolio management trade size is used accordingly. With any position you may take make sure that should something go awry the amount of total impact to your account does not devastate your acct. Try to stick to a 5% position That’s the key to virtual portfolio management, not biting off more than you can chew.
Remember the mechanics of reality with regards to the stock market states a stock can only do one of three things: Up, Down, Nowhere. The moment you hit the enter button you are at the mercy of the market therefore the only control you have is when to sell/cover. You can’t manage your gains as you have none to manage initially. Knowing this in advance it allows you to stay in outcome, that being you will either:
1. Make a gain
2. Wash
3. Get stopped out at a loss
Remember the market IS the boss. IT is going to do what IT wants to do.
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SUBSCRIBER ONLY WEB SITE
Don’t forget you can view updates in the middle and the end of each trading day complete with current charts, along with our current performance at our subscriber only web site.
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